Debt consolidation loans and reverse mortgages are two options that many people consider to resolve financial debt obligations.  One of the most popular debt reduction programs is debt consolidation.  When following a debt consolidation program, you will take out a loan and use it to pay off a number of smaller debts.  Once these small debts are paid-in-full, the only debt remaining is the consolidation loan.  Typically, the consolidation loan can be repaid at a lower interest rate than your original debts.

Your debt consolidation company will determine the monthly payments and rate of interest after considering your financial situation.  You will only have one account to pay off, instead of many small debts.  This makes it easier to manage, track, and reduce your debts.  The benefits of debt consolidation loans include: a lower monthly bill (compared to the combined bills of previous loans), a lower interest rate than before, fewer fees, easier money management, and an improved credit score if the repayment plan is followed.

Reverse mortgages are another option to consider if you are trying to pay off outstanding debts.  A reverse mortgage is a home equity loan for homeowners, aged 62 and above, that enables you to convert a portion of your home equity into tax-free income without selling your home, taking a new monthly mortgage payment, or giving up your title. In a reverse mortgage, the stream of payments is “reversed.” Instead of making monthly payments to your lender, your lender makes monthly payments to you for the equity in your home.